If you believe it better to be a month early than a day late, coincidental indicators that oscillate within a comparatively finite range should be taken seriously, though. There are a host of indicators—some of which are ratios—that have various degrees of predictive reliability.
Some of the best can be found at The Conference Board Leading Economic Index.
The back-to-back selloffs in late-2015/early-2016 were the only false-positives since 2000.
As you will observe, the 200-day moving average does not suffer the same lag affect as the Business Cycle Dating Committee’s pronouncements.
The upward trajectory of the S&P since 2009 has had several setbacks along the way, including declines of 16% in 2010, 17% in 2011, 11% in late 2015 and another 13% in early 2016.
The current and ongoing selloff registered a low point, down 12%.
When the 200-day moving average of those prices (in the yellow line above) decisively changes directions, in all but two instances over the last 50 years, a bull or bear market of the same stripes has ensued (19, concurrent with the recession of that year).The bar in red shows the business cycle peak in March 2001 was officially acknowledged some seven months later, on November 26, 2001.As for the trough, which occurred the same month the Committee acknowledged the peak, it was not officially noted until July 17, 2003.We can’t blame bad investment outcomes on the Business Cycle Dating Committee. Their work helps the authorities perform postmortems on expansions and contractions.Their job is to maintain a well-documented chronology of U. The data, however, is simply too stale to be of any benefit to investors.While it has been unusually volatile, such behavior is not unequivocally predictive of the future.